SERBIA Trends and Developments Contributed by: Uroš Popović and Tina Petrić, Drašković Popović & Partners
income, the income that the participants in the merger achieve in mutual exchange does not count. In addition, concentrations implemented through a takeover bid within the meaning of the Law on Takeo - vers of Joint Stock Companies (“Official Gazette of the Republic of Serbia”, No 46/2006, 107/2009, 99/2011 and 108/2016) must be notified even if the turnover threshold requirements are not met. Regarding approval, concentrations of undertakings are permitted unless they significantly restrict, distort, or prevent competition in the market of the Republic of Serbia or its part, especially if that restriction, distor - tion, or prevention results from creating or strengthen - ing a dominant position. The permissibility of concentrations is determined with special regard to the following factors: • structure of the relevant market; • actual and potential competitors; • market position of participants in concentration and their economic and financial power; • possibility of choosing suppliers and customers; • legal and other barriers to enter the relevant mar - ket; • level of competitiveness of participants in concen - tration; • supply and demand trends of the relevant goods or services; • technical and economic development trends; and • interests of consumers. The preventive nature of the Serbian merger control system ensures that notified concentrations may gen - erally only be implemented following clearance by the Commission. The procedure is divided into two phases. The Law provides that the Commission must issue a Phase I clearance decision or initiate a Phase II investigation within one calendar month of filing a complete notification, including all required informa - tion and supporting documentation, as well as Ser - bian translations where applicable. The one-month period begins on the first calendar day following receipt of a complete filing. If neither deci - sion is adopted within this period, the Commission is
no longer entitled to review the concentration, which may then be implemented without restrictions. In practice, case handlers may effectively extend this deadline by requesting additional information from the notifying parties, thereby declaring the notifica - tion incomplete and stopping the clock. The Commission has the discretion to either approve, prohibit, or approve concentrations with specified conditions. Normally, the Commission issues a Phase I clearance decision if the concentration does not lead to the ‘creation or strengthening of a dominant posi - tion’. The Commission is obligated to issue the Phase II decision within 4 months from the date of issuing the conclusion on the commencement of Phase II. The four-month period starts running from the first calen - dar day following the date of issuance of the conclu - sion. A concentration is deemed cleared if the Commission fails to deliver a decision within one month follow - ing the submission of a complete merger notification (four months if ex officio investigation proceedings are opened). It should be noted that, due to the set-up of the rel - evant financial thresholds, any concentration engaged in by an entity with over EUR100 million worldwide and over EUR10 million turnover in Serbia becomes notifiable in Serbia. This is why many foreign-to- foreign transactions are notified in Serbia, attracting significant criticism from the professional community. In addition to the notification obligation within the statutory time limit, there is a standstill obligation that prohibits the implementation of concentration before its clearance. The Commission may impose measures for the protection of competition (up to 10% of the aggregate annual turnover) for violating the standstill obligation through early implementation of a transac - tion, including procedural penalty measures. Concentrations and negotiations on their implemen - tation may pose a high risk of potential competition
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